Skip to comments.Wall Street Still Doesn't Love the GOP
Posted on 10/31/2010 9:31:04 PM PDT by Saije
Wall Street's love affair with President Obama is officially overor so we are told by much of the mainstream media. After enjoying Wall Street's praise (and donations) during the 2008 campaign, Mr. Obama has supposedly alienated the heads of the big banks to such an extent that they've spent most of their campaign cash on Republican candidates in tomorrow's midterm elections...
But based on my reporting, including interviews with senior banking executives, Wall Street doesn't so much love the Republican Party as it is hedging its bets on divided government. And barring an independent run by Mr. Bloomberg (which even his most optimistic Wall Street supporters concede is a long shot), the big bankers are planning once again to return to Mr. Obama's side for 2012...
...Wall Street and the banksfor all their fussing over Dodd-Frank or the Volcker Rule's tighter restrictions on speculative tradinghave been enormously profitable since 2008, thanks to the Federal Reserve's near-zero interest rate policy and a host of guarantees and other programs that have remained in place well into the first two years of Mr. Obama's term.
Furthermore, as much as the heads of the big Wall Street firms hate the new rules in Dodd-Frank that squeeze their trading and force them to hold more capital, there's one thing they hate even moretea partiers, who have become the new activist wing in the Republican Party.
It's easy to understand why: Central tenants of the tea party movement are that bailouts of failing financial institutions must end; that "big business" shouldn't enjoy subsidies from "big government"; and that taxpayers should no longer be footing the bill for Wall Street's mistakes.
(Excerpt) Read more at online.wsj.com ...
My hope is that Wall Street loves neither party! Politics should NOT be involved here and we can only hope that these companies rise or fall on their own. How about letting them fail or succeed on their own? What an unusual idea...
Banksters dont care, they’ll bribe anyone it takes. It doesn’t matter because it all goes to the public debt.
Yes, that is exactly why this Country is failing... Honesty is something for stupid people, not for the aristocrats.
Honesty and integrity seems to be a thing of the past with all of the major businesses. Maybe that is just a sign of our future downfall with the democratic process..
“My hope is that Wall Street loves neither party! Politics should NOT be involved here and we can only hope that these companies rise or fall on their own. How about letting them fail or succeed on their own? What an unusual idea...”
That’s the whole point of the article. The Dodd-Franks bill assures them that they won’t fail no matter how much they screw up. They will get a government bail out. It’s why Wall Street loves the Democrats.
Frankenstein’s monster gets to keep eating. :(:(:(
I doubt there ever was any honesty. It’s just that at some point the debt burden becomes great enough that even sports fans have to take notice.
I don’t think they give a hoot which party is where. They are interchangable when it comes to lobbying and getting things done.
These are betting people who will likely go with whomever they believe will win so they have a friend in the WH (or wherever) after everything is said and done. Should Bummer not moderate, then I’d say he’d get money comensurate with a longshot.
I have higher hopes.. yes, still naive after all these years.
Under “Normal” conditions, the market reflects consumer confidence of the future.
We now have no confidence in the future, and no “normal” conditions.
I hope this will all change this Tuesday!
Well, that was NOT my point. I was looking for honesty and integrity by companies regardless of who controlled the current government. I expect government to let them succeed and fail on their own. No interference! Seems like a grand wish these days...
If the GOP wants to succeed wildly, they would declare open war upon the bankers and their fraud schemes. Drag them into the light, conduct hearings and re-instate FASB 157 for starters.
The GOP should then take down the banks that fail as a result, clear out the senior management (and much of the middle management too), sell off the parts that are stable and not insane to those who can afford to buy them, form a RTC-like entity to take care of the rest of the crap, resolve the bank issues and allow the economy to function again.
The GOP should also call the Fed onto the carpet and start quizzing them as to why they allowed the situation to get so far out of hand, with the aid and encouragement of the Fed all along.
Stop sabotaging the success of our industry by communist BS and enfeebling crooked deals that make us uncompetitive in the global marketplace..
“If the GOP wants to succeed wildly, they would declare open war upon the bankers and their fraud schemes.”
I think that’s a winner. Call them out. We’ve got 2 years to educate the public. Must change the opinion that all money goes to pubs.
Nov 2 is only the 1st shot... there’s a long way to go.
Well they often fund both parties hedging their bets so if they wanted to put their money where their moth is then they would stop giving them cash.
Excellent - But who is going to lead the charge?
Well, not the current GOP leadership, that’s for certain.
As I look into the ranks of Republicans in office and running for office, I don’t see one person who really, deeply “groks” the current state of the financial markets, the banking system, the exchanges, etc and the scandals that have completely penetrated our financial system to the very foundations.
For example, if you lined up the entire GOP Congressional delegation AND all the candidates currently running, and you asked them “How does High Frequency Trading work - from where the machines are installed to how bids are stuffed and profits are made?” you’d get back hundreds of blank stares.
That’s the problem in the GOP today. It isn’t a problem that cannot be solved. Look at how many doctors (MD’s) are in the GOP ranks, which if the leadership will listen to them, should give the GOP an edge in healthcare policy debates. The GOP has plenty of accountants and businesspeople in their ranks. This is a problem of recruitment. The GOP needs to think like a national party and they need to say “OK, out of X senate/house seats we want to win, we need a talent portfolio of X so many MD’s, Y businesspeople, X financial people, N accountants, M engineers,” etc. Too many people in the GOP are allowed to occupy seats because they think it is ‘their turn.’ if the GOP really wants to lead from the front, they need to create their own cadre of policy wonks in the legislatures of the states and in Congress, and not rely on these pinheads from “think tanks” in the beltway.
Currently, the only person in the Congress I can point to who knows his butt from a warm rock about the scandals in the markets is Ted Kaufman, D-DE, who was appointed to fill Biden’s seat and who chose to not run again. Because he expressed his intent to not run for his appointed seat, no one (on either side) deemed it important to listen to him. And the “financial reform” bill shows this - most of Kaufman’s ideas were dropped on the cloakroom floor.
In general, I think the GOP’s leadership has far too little understanding of what a “free market” really is, and they fail to understand that, as long as we have the Federal Reserve, there is no free market in finance. The yield curve is partially controlled by the Fed, and that’s a huge component of what makes money for the finance sector. The secrecy with which the Fed hands out money at the discount window is another, and the various swap programs the Fed undertook in 2008 are other anti-free-market examples. If a bank approaches the Fed and says “Uh... we screwed up. We need to draw on the discount window... tonight!” that’s useful information in the free market. It tells the market that the senior management of that bank is utterly incompetent, their common stock should be shorted, their bonds sold and their credit rating slashed. Instead, the Fed keeps this information secret.
Ergo, there is no free market feedback mechanism to keep the bankers in line.
So the GOP should stop pretending that there is, and get on with writing coherent regulation to keep these idiots on Wall Street from burning the world down around our ears, ala Iceland.
I’ve thought about running for state-level office more than once, but every time I go to GOP meetings and listen to their agenda on spending, I can’t handle it. I have to contain my wrath and simply leave the room. When I talk to many Republicans about finance, I can see their eyes glaze over and roll back in their heads. They just clearly don’t understand the breadth and scope of the problem, and nostrums like “lower taxes” and “less regulation” are not going to solve the problems in the finance sector. Most of them don’t understand actuarial mathematics. They’re well-intentioned people, their morals and principles are absolutely in the right place... but they’re *so* far behind the curve on financial problems, it isn’t funny.
At this point, the GOP is in need of so much fundamental education on the topic before they can even understand the problems, it seems to be a task akin to cleaning the Augean stables. Someone needs to clean away 30 years of accumulated ignorance of how the financial markets have changed since the mid-80’s when Drexel started CDO’s in the junk bond era, and work forward from there. As Volcker has said on more than one occasion (and we shouldn’t discount what guys like Volcker say just because he’s a Democrat): “The most important financial innovation I’ve seen in the last 25 years is the automatic teller machine.” Volcker then went on to pooh-pooh most all other “innovations” on Wall Street as being nonsense. As Volcker pointed out, we had a great economic recovery in the 80’s without CDO’s and credit default swaps, yes? So... what have these products bought us? That’s where the GOP needs to start: demanding Wall Street justify the need for the “products” they want to create.
Hey what about John Mccain trying to bring back Glass Steagall in 2009 ? It didn't catch on. But maybe now? Any thoughts on that legislation. I think the financial crisis can be put on the Rubin, Summes wall street axis. Those geniuses from harvard who wanted to create "financial supermarkets" that are now hopelessly bankrupt and threatening to pull the real economy down with them.
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